Yorkshire deals market review in association with Grant Thornton

By Robert Umpleby, corporate finance assistant manager at Grant Thornton

In the second of a series of monthly columns on the Yorkshire deals market, from leading business advisory firm Grant Thornton, Robert Umpleby, corporate finance assistant manager, analyses the stand-out technology deals, their importance and the wider digital landscape across the region.

Over the past month there has been two notable tech transactions, both involving Yorkshire based businesses.

The acquisition of Perfect Commerce by Wetherby-based Proactis represents a transformational deal for the Group, its completion has resulted in the formation of one of the world’s largest cloud based spend management companies. The £102m deal has doubled the size of the existing group and provides the global scale needed to take advantage of the high growth areas within the spend management market. The deal was funded in part by a £70m public placing, which was reported to have been significantly oversubscribed indicating good support from the City for the acquisition.

The acquisition is a great example of how Yorkshire-based technology businesses are not only holding their own on the global stage but carving out a position as sector leaders.

The acquisition of Harrogate-based fintech firm Nostrum by the FTSE-listed Equiniti Group for a reported consideration of £12.5m is another notable tech transaction. Nostrum is a leading provider of loan management software for banks, finance companies and retail brands. The acquisition will strengthen Equiniti’s position in the lending sector and complement its existing platforms.

These two transactions are backed up by a series of others in the digital and tech sectors over recent months. Stand-outs include; the sale of Dialogue Group, the Sheffield based A2P SMS messaging company to Swedish based CLX in a transaction worth £32m; the management buyouts at Harrogate-based Ingenuity Digital and York-based Saville Audio Visual; the acquisition of Gateshead based Atomhawk Design by Sumo Digital and investments made in Wakefield-based Pitchero and Sheffield-based The Floow.

Alongside positive deal activity, the digital sector in Yorkshire is receiving more support from local public bodies, this is crucial if we are committed to supporting tech start-ups, and promoting the growth of established tech businesses in the region. Taking Leeds as an example, it was announced in April that more than £2m of funding had been invested in a new Tech Hub alongside other projects to encourage more activity in the sector.

This all provides evidence of the attractiveness of Yorkshire as a digital centre of excellence and the attractiveness of its technology businesses to a broad spectrum of buyers. Long may it continue.
Other non-tech deals to note in July.

Looking beyond the technology sector, July has been an active month for Yorkshire based Private Equity. Key Capital backed the £8.6m MBO of YorkTest, the first Yorkshire based investment from their new fund. Endless completed no less than four deals during the month, two of these were buyouts from fellow house LDC; the MBO of multichannel luggage business, Antler, and the acquisition of travel management company CTI. One of their portfolio businesses, Essential Fleet Services, acquired Go Plant and their SME fund Enact acquired Kennelpak, the pet food supplier.

Other notable deals in July included the sale of the Butterkist popcorn brand to KP Snacks and the acquisition of Harrogate-based Kimberly Rentals Group by Wakefield based AFI-Uplift forming a £100m turnover group.